Calif. business taxes among highest in U.S.

California has the 4th highest business taxes among U.S. states, according to a Small Business and Entrepreneurship Council report.

The "2009 Business Tax Index: Best to Worst State Tax Systems" ranks states according to the 16 taxes that most impact small companies.

The states with the highest combined business taxes are: New Jersey, Minnesota, Maine, California and New York.

Actually, that''s a slight improvement for California, which was 3rd in the 2008 index. However, the 2009 list probably doesn't take into account that California raised its sales tax April 1.

The states with the lowest business taxes are: South Dakota, Nevada, Wyoming, Washington and Texas.

"Taxes have been piling up on small-business owners and the cumulative burden is particularly painful in a down economy like we are suffering right now," says SBE Council Chief Economist Ray Keating. "Unfortunately, state and local officials continue to increase a variety of levies without a firm grasp of the burdens they impose on small businesses and their state's overall competitiveness."

The taxes included in the annual index are state personal and corporate income, capital gains, property, inheritance, unemployment, sales, gasoline and diesel, gross receipts, excise and Internet.

California's business taxes are a mixed bag. Our state personal income and capital gains taxes are the highest and gasoline is 3rd highest.

On the other hand, our unemployment tax is the lowest and property tax is 36th, thanks to Proposition 13.

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